Kevin Drum - October 2008

FRIDAY CAT KITTEN BLOGGING.... Last week I complained darkly of technical problems and feline noncooperation. This week those problems have been overcome and both Inkblot and Domino are taking the week off as a result. Instead, this week's catblogging features Lily, my mother's newest addition to the family.

My friends, this is a kitten you can believe in.

She is, of course, too young to run for president in 2012. But in cat years she'll be perfectly positioned to run in 2016, and she's practicing for the campaign by taking an executive position in my mother's house, where she apparently managed to take over completely within a few hours of her arrival. Poor Lucy didn't know what hit her.

QUOTE OF THE DAY #2....From Brad DeLong, trying to figure out what the hell has happened to the economy:

"A 3% decline in aggregate asset values should not be a big problem for the macroeconomy. Yet it is."

To me, the answer appears to be related to derivative speculation. But that is probably too simpleminded. My own personal simplemindedness aside, however, it scares me that the world's most sophisticated economists don't seem to know what the answer is either.

On the other hand, as near as I can tell, we still don't know for sure what caused the Great Depression or even the Black Monday crash of 1987. So maybe we'll never really know with this one either.

"If [the media] convince enough voters that that is negative campaigning, for me to call Barack Obama out on his associations, then I don't know what the future of our country would be in terms of First Amendment rights and our ability to ask questions without fear of attacks by the mainstream media."

The First Amendment protects politicians against attacks from the press? I guess Palin's not an originalist after all. She's an Orwellian.

CALIFORNIA INITIATIVE UPDATE....The latest Field Poll shows that Proposition 8, the initiative to ban gay marriage in California, is losing by five points, 49%-44%. That's closer than it was last month, when Prop 8 was losing by 17 points (55%-38%), which means the anti-gay forces are gaining ground and this is probably going to be close. On the bright side, undecided voters have a tendency to vote No on controversial initiatives, so there's a good chance Prop 8 will lose in the end.

By the way, I saw a No on 8 ad last night that actually mentioned the words "same-sex marriage." Only barely, mind you, but it's still something.

In other California news, Field says that both Prop 2 (decent treatment for farm animals) and Prop 11 (redistricting reform) are leading heavily. No news on Prop 1A, the high-speed rail bond.

INCOME vs. CONSUMPTION....In recent years, as it finally became impossible to deny that income inequality had risen to unnerving levels, conservatives began trying out a new argument: it's not income inequality that matters, they said, it's consumption inequality. If middle class people were buying 50% as much stuff as rich people two decades ago, and they're buying 48% as much as rich people today  well that's not such a big deal, is it? Middle class lifestyles, contra liberal whining, are in pretty good shape.

This has always been a fairly desperate attempt to deny an obvious problem. At the low end of the income spectrum it mostly depended on the fact that government welfare programs boost the incomes of the poor, which, though true, is something that's happened only over many a dead conservative body. They never approved of most of these programs in the first place, but they were happy to use them as evidence that the economy was doing fine for poor people anyway.

In the middle part of the income spectrum, the consumption argument relied on  what? Well, it's obvious: if your income is flat or down, but your consumption is rising, that means you're borrowing. It means you're taking out home equity loans, or maxing out your Visa card, or paying usurious rates to your local payday loan outlet. And sure enough, broad statistics show that as median incomes stagnated over the past eight years, household debt exploded. Of the increase in consumer spending we've seen over that period, several trillion dollars of it has been fueled solely by increased borrowing. It turns out  surprise!  that income inequality mattered after all. This debt explosion couldn't keep up forever, which means that eventually middle class consumption was bound to plummet. And now it has.

The long-feared capitulation of American consumers has arrived. According to Thursday's G.D.P. report, real consumer spending fell at an annual rate of 3.1 percent in the third quarter; real spending on durable goods (stuff like cars and TVs) fell at an annual rate of 14 percent.

To appreciate the significance of these numbers, you need to know that American consumers almost never cut spending. Consumer demand kept rising right through the 2001 recession; the last time it fell even for a single quarter was in 1991, and there hasn't been a decline this steep since 1980, when the economy was suffering from a severe recession combined with double-digit inflation.

....It's true that American consumers have long been living beyond their means....Sooner or later, then, consumers were going to have to pull in their belts. But the timing of the new sobriety is deeply unfortunate. One is tempted to echo St. Augustine's plea: "Grant me chastity and continence, but not yet." For consumers are cutting back just as the U.S. economy has fallen into a liquidity trap  a situation in which the Federal Reserve has lost its grip on the economy.

....The capitulation of the American consumer, then, is coming at a particularly bad time. But it's no use whining. What we need is a policy response.

The ongoing efforts to bail out the financial system, even if they work, won't do more than slightly mitigate the problem. Maybe some consumers will be able to keep their credit cards, but as we've seen, Americans were overextended even before banks started cutting them off.

No, what the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time the stimulus should take the form of actual government spending rather than rebate checks that consumers probably wouldn't spend.

Let's hope, then, that Congress gets to work on a package to rescue the economy as soon as the election is behind us. And let's also hope that the lame-duck Bush administration doesn't get in the way.

THE OBAMA TAPES....In an update on Michael Malone's General Theory of Media Tankiness for Barack Obama, John Derbyshire offers a Special Theory of Media Tankiness for Barack Obama that applies only to the LA Times. Sam Zell and Hank Paulson are involved. And a unicorn.

For those of you with the good sense not to have followed this story, it's about a piece the Times ran a few months ago describing a testimonial dinner in Chicago for Rashid Khalidi, a professor of Arab studies now at Columbia University. The Times has a videotape of Barack Obama's speech at the event, and wingers everywhere are demanding that they release it so that Fox News can put it on a 24/7 loop over the weekend. The Times says it can't release the tape because they promised their source they wouldn't, but conservoland unanimously agrees that only fools and knaves believe this transparently ridiculous story. The Times is really holding it back because Khalidi shouted "Death to Israel" on the tape while Bill Ayers lit an Israeli flag on fire, and Barack Obama laughed and clapped while all this was going on.

It's unclear, of course, why the Times even revealed the existence of this testimonial dinner in the first place if they were so in the tank for Obama, but I'm sure the wingers have an explanation for that. Conspiracy theorists always do. Stay tuned.

UPDATE: I don't actually know anything about Khalidi myself, but it's worth noting that he's a perfectly respectable scholar with mildly pro-Palestinian views that the McCain campaign is trying to use in one of their usual cackhanded efforts to convince the rubes that Obama is a radical/Muslim/Jew-hating/terrorist sympathizer. Hell, even Marty Peretz is standing up for Khalidi. Jo-Ann Mort has more here.

McCain spokesman Michael Goldfarb: "Barack Obama has a long track record of being around anti-Semitic, anti-Israel, and anti-American rhetoric."

Former Republican House leader Tom DeLay: "I tagged him as a Marxist months ago."

Republican congresswoman Michele Bachmann: "I'm very concerned that he may have anti-American views. That's what the American people are concerned about."

Republican presidential candidate John McCain: "I think his plans are redistribution of the wealth. He said it himself: 'We need to spread the wealth around'....That's one of the tenets of socialism."

National Review contributing editor Stanley Kurtz: "The fact that Obama funded extremist Afrocentrists who shared Wright's anti-Americanism means that this is now a matter of public policy, and therefore an entirely legitimate issue in this campaign."

Republican vice presidential candidate Sarah Palin: "Our opponent though, is someone who sees America it seems as being so imperfect that he's palling around with terrorists who would target their own country."

So Obama is anti-Semitic, Marxist, anti-American, a socialist, an extremist Afrocentrist, and a terrorist sympathizer. And that's just off the top of my head.

So here's the game: what else has the McCain campaign and its surrogates called Obama? The only rule is that the name caller has to be someone with credentials: a campaign aide, a national politician, a major league pundit, etc. No obscure bloggers or commenters from Free Republic. What have you got for me?

TWO MINUTE DRILL....At the end of every administration, there's a rush to put in place new regulations and executive orders before the clock runs out. The famously disorderly Clinton administration did this in 2000, but was so late with many of their new regs that they hadn't taken legal effect by January 20th. Jeffrey Smith tells the tale of the tape:

Clinton's appointees wound up paying a heavy price for procrastination. Bush's team was able to withdraw 254 regulations that covered such matters as drug and airline safety, immigration and indoor air pollutants. After further review, many of the proposals were modified to reflect Republican policy ideals or scrapped altogether.

Needless to say, the Bushies don't want the same thing to happen to their regulations, so they're making sure to finish them up quickly and get them issued so they take effect before the next administration moves in to the West Wing. You will be unsurprised to learn that these new regs are pretty much all designed to screw consumers and the environment:

The new rules would...lift constraints on private industry, including power plants, mines and farms...clear obstacles to some commercial ocean-fishing activities, ease controls on emissions of pollutants that contribute to global warming, relax drinking-water standards and lift a key restriction on mountaintop coal mining.

....A rule put forward by the National Marine Fisheries Service and now under final review by the OMB would lift a requirement that environmental impact statements be prepared for certain fisheries-management decisions and would give review authority to regional councils dominated by commercial and recreational fishing interests.

....One rule, being pursued over some opposition within the Environmental Protection Agency, would allow current emissions at a power plant to match the highest levels produced by that plant, overturning a rule that more strictly limits such emission increases. According to the EPA's estimate, it would allow millions of tons of additional carbon dioxide into the atmosphere annually, worsening global warming.

A related regulation would ease limits on emissions from coal-fired power plants near national parks.

A third rule would allow increased emissions from oil refineries, chemical factories and other industrial plants with complex manufacturing operations.

Just a little something extra to remember the Bush administration by. Especially if you live near a power plant, oil refinery, or chemical factory. And double especially if you love the smell of napalm in the morning.

The best-kept secret in Washington is that Barack Obama has the largest and most disciplined presidential transition team anyone can recall. Headed by John Podesta, former chief of staff in Bill Clinton's White House, it started work well before the financial meltdown hit in September but has been swamped by its implications ever since.

....The Democratic nominee has already reached an agreement with Harry Reid, the Democratic Senate majority leader, to speed up the often painstakingly slow Senate confirmation process for the hundreds of appointees who would populate an Obama administration. Many of Mr Clinton's appointments were still to be confirmed a year after he took office.

...."The level of detail that the Obama transition team is getting into is extraordinary  they are leaving no stone unturned," said a senior former Clinton administration official who has been consulted. "I have been getting calls that you'd expect in previous transitions to get maybe in December or never at all."

The article also notes that transition team insiders "are under strict orders from the Obama campaign not to talk to the media to avoid giving the impression Mr Obama thinks he has won already." Good advice. Apparently not all of them are taking it, though. Here's more from John Heilemann:

With the help of some 50 old Washington hands, Podesta and his people are drafting a book-length transition blueprint, with agency-by-agency policy agendas, including day-one, day-100, and year-one objectives, too. Résumés are already being collected. Daily conference calls and meetings occur. Of Obama's pre-transition planning  and, in fact, of McCain's as well  Clay Johnson has said, "The amount of work being done before the election, formal and informal, is the most ever."

....Almost certain to come first, perhaps within days, will be his economic and national-security teams. And with those choices, they say, he will want to send a message of centrism and bi-partisanship. It's conceivable that Obama will ask Bob Gates to stay on as Defense secretary; Chuck Hagel, too, might find a place high in the administration. But although there has been chatter that Obama might also retain Hank Paulson at the Treasury, the inside betting is on a Larry Summers encore. "They're gonna want somebody who knows the building, knows the economy, has been confirmed before and been advising them on economics," says the former Clinton aide. "I'd be flabbergasted if they chose somebody else."

THE WAR AGAINST GORE....CONTINUED....Bob Somerby replies today to my question about whether liberals should spend more time complaining about media treatment of Al Gore during the 2000 campaign (and more generally, of media treatment of the Clintons during the 90s). My take is that I don't think it would do us any good to harp on this; Bob thinks we're a million light years from "harping" on it and should at least mention it on a regular basis:

Last week, Naomi Judd began telling voters that no one has ever been trashed like Palin. Quite naturally, voters tend to believe such claims, because they've never heard anything different...."Liberal bias" is a powerful card, a card they've spent fifty years perfecting. They play this card because it works; it keeps working because our side has refused to debunk it. As we've long said, we refuse to tell the public the truth about the press corps' recent conduct. One side keeps saying things which are bogus. And one side won't say what is true.

I'd say the difference here is that Judd was complaining about the treatment of Sarah Palin right now. That's news. People care about it. Conversely, complaining about the media treatment of Al Gore a decade ago would cause audiences to yawn and turn the channel. Maybe that's not fair, but the world is what it is.

It's certainly true that liberals should have complained more about media treatment of Gore back when it happened (I think Bob has convinced everybody of that), but what good would it do to bring it up regularly now? It would be like conservatives continually kvetching about media treatment of Dan Quayle or Richard Nixon (who at least arguably lost the 1960 election because he got worse press treatment than JFK). Occasional passing references are fine, but anything more and audiences today will just tune out.

Much better, I think, to do what conservatives do: complain about today's media misconduct loudly and aggressively when we think we see it. Liberals might still not be as good at media grievance mongering as conservatives, but we've made up a lot ground since the 2000 election. And at this stage of the game, I just don't see how amping up our complaints about press treatment of Al Gore in the previous century will help us make up the rest of the distance.

POSTSCRIPT: I've gotten more than a few emails asking why I care about this. The reason is that despite his endlessly irritating and over-the-top attacks on me and others in the liberal blogosphere, I still read Bob every day. I do that because he has interesting things to say  most of which, unfortunately, get drowned out by his Gore obsession. If he'd forget about Gore, tighten up his prose, cut the snark levels down to a dull roar, and spend his time in the present, he seems like he'd be a more effective media critic. And we could use that.